SiriusXM Industry Profile

SiriusXM is a satellite radio corporation with approximately 32.7 million subscribers as of 2018. They broadcast music, news, and entertainment programming, mostly ad free, via satellites and corresponding terrestrial facilities. SiriusXM currently controls almost 30% of the US radio market, with its closest competitor, iHeartMedia Inc., trailing behind with only 17.5% of the market under its control. Its primary competitors are iHeartMedia Inc., Entercom Communications Corporation, and Cumulus Media Inc.

The company became what it is today through the merging of Sirius Satellite Radio and XM Satellite Radio in 2008, following a year long approval process from the FCC and the United States Department of Justice. XM Satellite Radio and Sirius Satellite Radio started airing programming via satellite in 2001 and 2002, respectively, but each company was founded in the early 90's pursuing the audio industry with the then current technology. The current company focuses on the US market primarily. They do not broadcast abroad, although they do have a division in Canada.

Revenue is accumulated through subscription fees users pay to have programming delivered to their cars. Some talk shows and sports programming make money through traditional advertising, but this is minimal and not the norm. SiriusXM has partnerships with Acura, BMW, Ford, Kia, Subaru, and every other major car manufacturer in the United States, all of which manufacture cars with satellite compatible equipment so drivers don't have to purchase satellite radios apart from their automobile.

SiriusXM is publicly traded, and the current share price is $6.14, down 11% from last month, likely due to the public believing their purchasing of Pandora was overvalued. Consequently, Pandora's stock shot up by 13% in September of 2018 when the deal was announced, because many were buying the Pandora stock they knew would soon merge with Sirius XM stock. Even with the devaluing of SiriusXM stock, the price of a share has only gone down 2% in the past six months and has actually gone up 6.98% in the past year, showing an overall positive trend. This bodes well for Liberty Media, which owns approximately 70% of Sirius XM stock as of May 2018.

As previously stated, SiriusXM is planning to merge with past competitor Pandora for $3.5 billion, signaling a shift into Internet Radio following the advent of streaming services like Pandora, Spotify, and Tidal. This deal has been approved since September 2018, but will not be official until some point during the first quarter of the following year. Through this deal SiriusXM will gain the audience Pandora currently possesses and both companies will benefit from the natural synergy of merging these two audio powerhouses. The company recently launched SiriusXM with 360L, a new service, airing through satellite but customized through the internet, which takes in what users listen to and customizes their experience with recommendations and spotlight channels. This service is subsequent to them recently launching an On Demand option for users. SiriusXM's revenue is projected to go up by 8.6% to $5,889 million in 2018, from $5,425.1 million in 2017.

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